Tag: Taxes (5 articles found) - Clear Search

Understanding Nightly Rentals #3

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If you’ve been following along, we’ve discussed the regulatory side and an introduction to the tax side of doing short-term rentals. Today we will discuss how to hold title and save on the self-employment Taxes we mentioned last month.

First, hopefully you now understand that the rent you make from short-term rentals is taxed differently as active income. That means it’s taxed more like your flip projects that you run through an s-elected LLC. (We’ve done other blogs on s-election and tax savings! Go back and review some of those if you don’t understand how the s-election saves on Taxes on ordinary income.) While is it totally fine to own your flip in an s-elected LLC, it is NOT good to own a rental property in an s-elected LLC. This is because there is a “sale of asset” tax that can apply when you transfer or sell an asset you’ve held for a long time. You don’t want to pay this tax!

So, just like any other rental property, you should “own” the property in an LLC that is Taxes as either a single member or partnership. And if available to you in your state, a Series LLC. This will be the same LLC that you own all your other rental properties in. So that’s good news! You will own yo
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What Happens When The Feds Put A Tax Lien On Your Property?

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What Happens When The Feds Put A Tax Lien On Your Property?

The Federal Government does not play around when you owe them money.

Are there some strategies to deploy if you get caught in this fix?

With any tax debt comes an awkward and unwelcome house guest: A federal tax lien.

This tax lien exists as a matter of federal law, even if you only owe the IRS one dollar. For many people, it has no impact at all on their lives. But for a small percentage of taxpayers, it can have a massive impact.

Let’s explore what this tax lien means for you, and briefly discuss some potential solutions to dealing with it.

Before we really get started, there’s one important distinction that needs to be made. Usually, there’s no public record of a tax lien. It’s not possible for anybody to find out about it... usually.

Unfortunately, under certain conditions, especially if you owe more than $10,000, the IRS may file a written notice with the county clerk about the tax lien, putti
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Cryptocurrency Taxation

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"Don't judge each day by the harvest you reap but by the seeds that you plant." -Robert Louis Stevenson

In recent years, some cryptocurrency traders have been caught off guard by the surprise tax bill generated from their trading activities. Many others have simply failed to report these transactions to the IRS at all, unaware that they even need to. Those folks in particular are in for a rude awakening someday, as the IRS expands its enforcement against crypto traders.

So, what are your responsibilities as a crypto trader? What if you’re not actively trading these assets, but simply holding them? What records should you be keeping?

Crypto is Taxed as Property
Let’s start with the most important thing you need to understand about crypto, and its relationship with the IRS: The federal government Taxes crypto like property.

In other words, the IRS looks at crypto the same way it looks at houses, cars, pa
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Free Puppies, Sleight Of Hand, And Pennies On The Dollar

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Some things are obviously a sales pitch and a come-on. Unsuspecting taxpayers get hooked into this tantalizing offer every year.

Almost no one qualifies for this program from the IRS. By-the-way, it is unethical for a licensed tax preparer to make this offer.

When I hear commercials on TV or on the radio that promise specific results to people who owe money to the IRS, it really bothers me.

One of the most pervasive advertising schemes you’ll hear repeated over and over again is about only paying “pennies on the dollar” to the IRS.

The reason this one rubs me the wrong way in particular is quite simple: It doesn’t exist.

If you’ve heard this program referenced and have been curious about it, it’s time to set the record straight.

The Truth About “Pennies On The Dollar”

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It Ain’t Over ‘Till The XXXXX Lady Sings

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This has been an apocalyptic year and tax season for our Investor friends. In reality, there are only a few folks who are COMPLETELY done with their income tax today. For most, their questions go unanswered.

As I write this, today (May 17th) marks the end of a tumultuous tax season.

Without a doubt -- pardon the pun -- it’s been taxing for everybody. In conversation with many colleagues around the country ... there is wide agreement that *this* season has been the most challenging in decades.

Next Steps

Soooooo, what now? I'm glad you (ahem) asked.

Depending on your circumstances, you may be looking for information from the IRS, status updates, or just needing help with various matters. Here are a few “what ifs” that you might be thinking about.

1). If the IRS owes you a 2020 refund, be patient.
While they aim to issue most refunds within 21 days, the reality is that the IRS is
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